TaxTMI 
TaxTMI 
2022 (9) TMI 1151
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....ded on 18.11.2009, should be made applicable to cough syrups containing miniscule percentage of Codeine since it has medicinal value and is also easily available?" 2. The background for such reference is that during the course of the hearing in the bail application, filed on behalf of the petitioner, in a Complaint Case No. 62/2020, dated 31.01.2018, filed by customs under Sections 21(C) and 23(C) of The Narcotic Drugs and Psychotropic Substances Act 1985 (hereinafter "NDPS Act"), one of the points that arose for consideration was whether the recovery of 110 bottles of 'Phensedyl New' weighing 100 gms each and having a Codeine concentration of 0.17% per bottle would be considered as 'commercial quantity' under the NDPS Act. 3. The attention of the learned Single Judge was drawn to a judgment of another learned Single Judge of this Court in Iqbal Singh vs. State (BAIL APPLN. 645/2020), wherein the learned Single Judge vide order dated 31.07.2020 had held that cough syrup bottle (Onerex) containing Codeine Phosphate would fall outside the scope of the definition of 'manufactured drug' under Section 2(xi) of the NDPS Act. The aforesaid finding of the learned Single Judge was based o....
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....ow the prescribed threshold, cannot be construed as a manufactured drug by dissecting its ingredients and considering them in isolation." 7. In this backdrop, the learned Single Judge, in the present matter vide order dated 25.06.2021 observed as under: "16. A reading of the judgment in lqbal Singh (supra) therefore shows that this Court has created a distinction between illicit substances which are sold in mixtures containing neutral substances or which may have the effect of enhancing the effect of the offending substance or facilitate its abuse and a non offending substance or preparation with bifacial qualities which may have the miniscule quantities of a substance which are also used for medicinal purposes and are available in medical shops across country." The learned Single Judge further observed: "21. Be that as it may, para 8.4 and para 10(II) of the judgment of the Supreme Court in Hira Singh v. Union of India reported as (2020) SCC Online SC 382 does not make any distinction between manufactured drugs with a miniscule percentage of narcotic substance and other mixture of narcotic drugs or psychotropic substance out of a neutral substance. The judgment of Iqbal Sing....
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....urther submitted that the alleged recovery of 110 bottles of cough syrup, measuring 100 ml each contained 0.17% of Codeine Phosphate and therefore it was contended that since Codeine was not more than 100 milligrams in each bottle, the same would not be a 'manufactured drug' under the NDPS Act. In other words, the cough syrup containing Codeine is used for "therapeutic practice" and therefore is not a narcotic drug under the NDPS Act. 12. In view of the foregoing, submissions on behalf of the petitioner was that, the reliance placed upon the judgment of the Hon'ble Supreme Court in Md. Sahabuddin & Anr. vs. State of Assam (2012) 13 SCC 491 by the respondent was not applicable to the facts and circumstances of the present case as the alleged recovery in Md. Sahabuddin (supra) was extremely huge and the Codeine percentage in the cough syrup recovered therein was also 5%, which exceeded the permissible limit of 2.5%. 13. The learned counsel for the petitioner also relied upon an order dated 26.10.2005 issued by the Drug Controller General of India, inter alia, directing as under:- "As you are aware there are number of Cough preparations like Corex of M/s Pfizer Ltd. Mumbai, Phense....
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.... and the issue of a miniscule quantity of an alleged narcotic drug like Codeine, used within permissible limits in medicinal products which are available to be bought online and offline with prescriptions, was not under consideration before the Hon'ble Supreme Court. 16. Learned Counsel for the petitioner, on the basis of the aforesaid submissions, prayed for grant of bail to the petitioner in the present matter. 17. Learned SPP appearing on behalf of the respondent submits that the interpretation with regard to the questions referred by the learned Single Judge is completely covered by the judgment of the Hon'ble Supreme Court in Hira Singh & Anr. vs. Union of India (supra). 18. Learned SPP for the customs further relies upon the judgment of the Hon'ble Supreme Court in Md. Sahabuddin (supra) wherein the Hon'ble Supreme Court has held that if Codeine Phosphate was being transported illegally without proper documents, it cannot be presumed that it was for therapeutic practice in spite of it being a Schedule H drug. It was further submitted that Section 80 of NDPS Act, inter alia, provides that the provisions in said Act shall be in addition to the Drugs and Cosmetics Act, 1940 a....
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....examining the provisions of the NDPS Act as well as The Drugs and Cosmetics Act, was of the prima facie view that the alleged recovery from the petitioner was of a cough syrup (having codeine as one of its ingredients) which is not a narcotic drug covered under the NDPS Act. The learned Single Judge in Para 16 observed: "16. The product recovered from the petitioner is a cough syrup and not any narcotic drug. Mr Dhaka also pointed out that the said product (cough syrup) is sold openly in the market and is also available online. The fact that the said product also includes miniscule quantity (0.17%) of a prohibited or controlled substances cannot, prima facie, change the nature of the product. In terms of Entry 35 of the list of manufactured drugs (as contained in Govt. of India notifications SO 826(E) dated 14.11.1985., S.O. 40(E) dated 29.01.1993 and S.O. 1431(E) dated 21.06.2011), the product recovered from the petitioner does not fall within the ambit of a manufactured drug as the content of Codeine phosphate is less than 2.5%." 22. As far as the decision of Hon'ble Supreme Court in Hira Singh (supra), is concerned, it is observed that the learned Single Judge in Iqbal Singh ....
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....". (emphasis supplied) Section 2(x) defining the term 'manufacture' reads as under: "manufacture", in relation to narcotic drugs or psychotropic substances, includes- (1) all processes other than production by which such drugs or substances may be obtained; (2) refining of such drugs or substances; (3) transformation of such drugs or substances; and (4) making of preparation (otherwise than in a pharmacy on prescription) with or containing such drugs or substances;" (emphasis supplied) Section 2(xi) defines "manufactured drug" as follows: "(a) all coca derivatives, medicinal cannabis, opium derivatives and poppy straw concentrate; (b) any other narcotic substance or preparation which the Central Government may, having regard to the available information as to its nature or to a decision, if any, under any International Convention, by notification in the Official Gazette, declare to be a manufactured drug; but does not include any narcotic substance or preparation which the Central Government may, having regard to the available information as to its nature or to a decision, if any, under any International Convention, by notification in the Official Gazette, ....
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.... than 2.5% in undivided preparation, and the drug has been established in therapeutic practice, it will not be a 'preparation' within the meaning of 'manufactured drug' and, therefore it will not to be a 'narcotic drug'. 30. It is also admitted fact that to clarify this position, on 26.10.2005, the Drug Controller of India, has written a letter to the State Drug Controller stating as follows: "As you are aware there are number of Cough preparations like Corex of M/s Pfizer Ltd. Mumbai, Phensedyl of M/s. Nicholas Piramal India Limited, Mumbai, Codokuff of M/S. German Remedies, Codeine Linctus of M/s Zydus Alidac etc. moving in inter state commerce. These preparations contain among other drugs Codeine Phosphate 10 mg as one of the ingredients. By virtue of the fact that these preparations contain Codeine and it salts they do not fall under the provisions of NDPS Act and Rules of 1985 but they fall under Schedule H of the Drugs and Cosmetics Rules and are governed by the said rules." 31. In view of the above provisions of the NDPS Act, The Drugs and Cosmetics Act, The Drugs and Cosmetics Rules, 1945 and the aforesaid circular, the learned Single Judge in Iqbal Singh (supra) came t....
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....cted upon the appellants. Therefore, the appellants' failure to establish the specific conditions required to be satisfied under the above-referred to notifications, the application of the exemption provided under the said notifications in order to consider the appellants' application for bail by the courts below does not arise. 13. As far as the grievance raised on the ground that the appellants were illegally detained beyond 24 hours by the police is concerned, the conclusion of the High Court having been based on the satisfaction reached by it, we do not find any scope to interfere with the same." 33. Recently, the Hon'ble Supreme Court in State of Punjab vs. Rakesh Kumar (2019) 2 SCC 466, reversed a decision of the Hon'ble High Court of Punjab and Haryana, granting suspension of sentence to the convicts under Section 389 Cr.P.C and held as under: "10. In the present case, the respondent-accused were found in bulk possession of manufactured drugs without any valid authorisation. The counsel on behalf of the appellant State has extensively stressed that the actions of the respondent-accused amounts to clear violation of Section 8 of the NDPS Act as it clearly prohibi....
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....said decision is related to an order passed by the Hon'ble High Court of Punjab and Haryana, granting suspension of sentence to convicts under the NDPS Act. Some of the said cases in the table which is a part of the aforesaid judgment reflect that some of the respondents therein were convicted for possession of cough syrup containing Codeine Phosphate, while others had been convicted for possession of other narcotic drugs or psychotropic substances. 35. A division bench of the Hon'ble High Court of Allahabad in case titled as Vibhor Rana vs. Union of India, 2021 SCC Online All 908, after analyzing the provisions of the NDPS Act, The Drugs and Cosmetics Act, and the Drugs and Cosmetics Rules, observed as under: "24. The prohibition contained in Section 8 of the Act is applicable to "Narcotic Drugs" and since Phensedyl New Cough Linctus contains Codeine compounded with one other ingredient, namely Chlorpheniramine Maleate and since Phensedyl New Cough Linctus contains merely 10 milligrams per dosage unit of 5 ml, which is not more than 100 milligrams of the drug per dosage unit in undivided preparations and the concentration of Codeine in Phensedyl New Cough Linctus is merely 0.2%....
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....0 milligrams of the drug per dosage unit and with a concentration of not more than 2.5 per cent in undivided preparations and which have been established in therapeutic practice." 27. In March 2009 the Drugs Controller General (India) had issued a letter to the Associated Chambers of Commerce and Industry of India in response to a request for clarification of drug substance Cough Linctus containing codeine Phosphate stating that:- "In this connection this Directorate had already issued a circular letter vide our letter number X-11029/27/05-D dated 26/10/2005 to all State Drugs Controllers with a copy to various associations and a copy Narcotic Control Bureau New Delhi (copy enclosed). The above circular inter alia stated that these preparations (Cough Linctus containing Codeine Phosphate) contains among other drugs Codeine Phosphate 10 mg as one of the ingredients. By virtue of the fact that these preparations contain Codeine and its salts they do not fall under the provisions of NDPS Act and the Rules of 1985 but they fall under Schedule H of the Drugs and Cosmetic Rules and are governed by the said rules. Though stocking and sale of these drugs do not attract the provisions....
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....nsedyl New Cough Linctus contains Codeine compounded with one other ingredient, namely Chlorpheniramine Maleate and contains merely 10 milligrams per dosage unit of 5 ml, which is not more than 100 milligrams of the drug per dosage unit in undivided preparations and the concentration of Codeine in Phensedyl New Cough Linctus is merely 0.2%, which obviously is not more than 2.5%. and the precise question involved in the case is on the basis of the aforesaid undisputed facts, whether Phensedyl New Cough Linctus falls within the exception mentioned in entry 35 of the Notification dated 14-11-1985 or not and consequently, whether the provisions of the NDPS Act would apply to it or not. Therefore, both the aforesaid judgments are not relevant for deciding the question involved in the present Writ Petition." 37. It may be noted that in the judgment of Hon'ble Supreme Court in Md. Sahabuddin (supra) it had been observed that the twin conditions in Entry 35, as aforesaid mentioned, would be fulfilled only if the recovered substance was "being used for therapeutic practice" and further observed in Para 11 of the said judgment; "11...Therapeutic practice as per dictionary meaning means "c....
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....ingredients and containing not more than 100 milligrams of the drug per dosage unit and with a concentration of not more than 2.5% in undivided preparations", Phensedyl New Cough Linctus is not a Narcotic Drug and any dealing in this drug would not be subject to the provisions of the NDPS Act. The search and seizure conducted by the NCB Officials in Jaunpur on 17-01-2021 was without any authority of law and so is the complaint filed on 15-07-2021 by the Intelligence Officer, NCB under Sections 8, 21 (c), 22, 25, 29 and 60 (3) of the NDPS Act in the Court of Special Judge, NDPS Act at Jaunpur." 39. The aforesaid judgments, however, have not considered the scope of Section 9(1)(a)(va) of the NDPS Act which provides as under: "9. Power of Central Government to permit, control and regulate.- (1) Subject to the provisions of Section 8, the Central Government may, by rules- (a) permit and regulate- xxx (va) the manufacture, possession, transport, import inter-State, export inter-State, sale, purchase, consumption and use of essential narcotic drugs: Provided that where, in respect of an essential narcotic drug, the State Government has granted licence or permit under the pro....
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....ce 2000 Milligrammes 3. Dihydroxy Codeinone (commonly known as Oxy-codone and Dihydroxycodeinone), its salts (such as Eucodal Boncodal Dinarcon Hydrolaudin, Nucodan, Percodan, Scophedal, Tebodol and the like), its esters and the salts of its ester and preparation, admixture, extracts or other substances containing any of these drugs 250 Milligrammes 4. Dihydrocodeinone (commonly known as Hydrocodone), its salts (such as Dicodide, Codinovo, Diconone, Hycodan, Multacodin, Nyodide, Ydroced and the like) and its esters and salts of its ester, and preparation, admixture, extracts or other substances containing any of these drugs 320 Milligrammes 5. 1-phenethyl-4-N-propionylanilino-piperidine (the international non-proprietary name of which is Fentanyl) and its salts and preparations, admixture, extracts or other substances containing any of these drugs Two transdermal patches one each of 12.5 microgram per hour and 25 microgram per hour: Provided that the Controller of Drugs or any other officer authorised in this behalf by him may by special order authorise, in Form 3-B, any such practitioner to possess the aforesaid drugs in quantity larger than as specified in the ....
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....ribed by a Registered Medical Practitioner. (3) The research institution, hospital and dispensary referred to in sub-rule (2) shall maintain proper accounts and records in relation to the purchase and consumption of the psychotropic substance in their possession. A bare perusal of the aforesaid rule clearly shows that the reliance placed on the same by learned counsel appearing on behalf of the petitioner is misplaced. The aforesaid Rule 66 relates to psychotropic substances and therefore, is not applicable to 'codeine' which is admittedly a 'narcotic drug' under the NDPS Act. 42. As mentioned earlier, the term 'essential narcotic drugs' has not been defined under the NDPS Act but the table in Rule 52A, Sub-Rule (3), at serial no. 2, under the title "Name of essential narcotic drug" gives a description of Methyl Morphine (commonly known as 'Codeine'), which is an exact verbatim copy of Entry no. 35 in notification titled "Manufactured Narcotics Drug" (as contained in Government of India Notification No. S.O. 826 (E) dated 14.11.1985 and S.O. 40(E) dated 21.09.1993 and S.O. no. 1431 (E) dated 21.06.2011). A combined reading of Rule 52A of The NDPS Rules and Entry no. 35, in the ....
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....ng any activity of DEALING IN narcotic drugs or psychotropic substances. (emphasis supplied) 45. The aforesaid amended provisions of the NDPS Act and the Rules made thereunder were not brought to the notice of the learned Single Judge of this court in Iqbal Singh's case (supra) as well as to the notice of the division bench of the Hon'ble Allahabad High Court in Vibhor Rana's case (supra). 46. In view of the foregoing analysis of various provision of the NDPS Act, NDPS Rules, The Drugs and Cosmetics Act and the Drugs and Cosmetics Rules and the judgments referred to, we answer the reference in the following terms: Question - "(c) whether Note 4 of the S.O. 1055 (E) dated 19th October, 2001 published in the Gazette of India,. Extra., Pt.II, Sec3 (ii) dated 19th October 2001, as amended on 18.11.2009, should be made applicable to cough syrups containing miniscule percentage of Codeine since it has medicinal value and is also easily available?" Ans: If the contraband recovered in a particular case is covered by Rule 52A of the NDPS Rules made under Section 9(1)(a)(va) of the NDPS Act, then violation of the said Rules would be punishable under the NDPS Act. In that situation, Not....